When it comes to divorce, there is a lot of information out there. Some is based on cultural perception and some on hard statistics. One stat that might surprise people is the divorce rate for Americans over age 50.
Since the 1990s, the divorce rate has doubled among couples over age 50. Americans of this age group have different priorities than those in their twenties through forties. Instead of focusing on raising children, the emphasis is often financial as they look ahead to retirement.
What is gray divorce?
Sometimes called “gray divorce,” it usually happens after children have left the house and as parents now shift attention to their post-working years. Some families may have stayed together through a rocky marriage, waiting for the children to reach adulthood. Others seek divorce in their 50s because they foresee trouble maintaining the relationship through the retirement years.
Everyone’s reasons for divorce are different, but there are common challenges for people in this age group. Whether you’ve raised children or not, most people shift their focus toward their retirement at this time. This includes additional savings into specialized accounts and planning timelines for distribution and withdrawal from those accounts. If you’ve spent extra in your forties, perhaps helping adult children get through college, then there is likely some retirement catch-up to do before you can move to that next step.
Retirement accounts have their own rules
Illinois divorce splits property equitably between partners, but that doesn’t mean your new budget will be 50 percent of what you’re used to. Cost of living expenses are much different for single individuals than for housemates, and anyone divorcing before they can withdraw from their retirement funds likely faces extra challenges.
Most retirement accounts include significant tax penalties and fees for early withdrawal. When dividing property, divorcing couples can either trade assets (the husband keeps one account, the wife keeps another), or they can hold onto them until distribution—splitting the value equally at that time. In such a case, divorcees need another source of income until they reach that age. Studies show that women experience greater losses than men in later-in-life divorce.
The right settlement
There are certainly unique challenges for divorce after the age of 50, but that can be said of any age group, whether just out of college and establishing careers in their twenties, or establishing families in their thirties and forties. The key to any divorce is navigating those issues and finding a settlement that works for you and your divorcing partner: minimizing the economic impact of divorce and helping you establish a framework as you look forward to a happy retirement.